Market Report

End to increase export prices

Tilburg, November 12th, 2017

A lot of time was taken at the European Paper Conference in Warsaw in order to try to get some clarification regarding imports of recovered paper (and plastics) into China. It became clear that nobody really knows what is going to happen. Yes, mixed paper seems to be banned. It is not clear yet though for many other grades that are classed under the same code. There is also still no certainty about how much contamination will be accepted. The already indicated 0.3% does not seem to be certain yet and could also become 0.5% or 1%. Cycle Link stated that with trials of clean French card board contamination even exceeded 1%. In general the thought was that eventually there will be alternative outlets in other countries for recovered paper and plastics that is not allowed into China anymore. That might be so in the long run, in the short term a real problem is existing when what has been announced so far becomes reality. One of the big Chinese buyers sent a letter to it suppliers on November 9th indicating in which cases suppliers will be made responsible for the consequences of rejections of supplies by China. In line with earlier news from China also this letter does not bring any clarity what real limits are. It looks like a text litteraly translated from Chinese. It mentions also radioactivity. Meaning is that suppliers will sign this document to accept the indicated conditions as there is a space for the supplier to undersign. The percentage of prohibitives is not filled out yet, so that might vary for each supplier. You must be pretty desperate to agree to these terms. Anyway, nothing has been gained on clarity on exports to China. The market in Europe however has gone a bit clearer. In the meantime local buyers adjusted their purchase prices upward for low grades, depending on region, with € 10 to € 25 per ton. Extremes of € 40 per ton have not been noted (yet), although


some buyers have stated to take a wait and see position for the time being. It seems a good decision now that Chinese buyers announced status-quo and kept prices unchanged for the first time in several weeks. For middle grades prices stayed unchanged at best, in worse cases prices were reduced by € 5 to € 10 per ton. Better grades are sought after due to the ever higher pulp prices and tendency in prices is up. All and all a good market, with a possibility that China might spoil the party eventually, so the situation remains a bit stress.

China: imports August +10%

Imports of recovered paper in China totalled in August this year to 2.599.000 tonnes which was almost 10% more than the same month last year. Cumulative for the year imports were 19.600.000 tonnes which is an increase of 4.4% compared to the first 8 months of 2016.
It is expected that with the recent import barriers this figure wel go down significantly. Talk is that maximum imports for this year will only reach 22 million tonnes.

Price indication

Price indications in Europe for low grades of recovered paper, sorted, baled and ex-works are now between € 90 and € 150 per ton. These prices are depending on quality, available volume, region and loaded weight.

Click here for the price chart, with prices of the last 10 years.

The price chart gives an indication of the price of mixed paper in the Netherlands free delivered mill over the last years.  Scrolling over the top of the colums gives the exact price indication in Euro's per ton.